Commentary

Franchise tag drop helps teams

Change in how values are calculated is giving players less leverage

Originally Published: March 8, 2012
By John Clayton | ESPN.com

Values for NFL franchises couldn't be higher.

The new collective bargaining agreement gave the NFL 10 years of labor peace. The league cut a deal that provided teams a better percentage of revenues. Network television extensions add billions to the fortunes of the league.

How did the value of franchise players drop?

Franchise wide receivers dropped from $11.3 million to $9.4 million. Quarterbacks went from $16 million to $14.4 million. Running backs fell from $9.5 million to $7.7 million. Cornerbacks fell from $14 million to $10.4 million. As a result, 21 players were franchised and the lower franchise numbers have given teams more leverage in negotiations with key unsigned veterans.

In the final stages of putting the collective bargaining agreement together, league negotiators slipped in a slight adjustment in the calculation of the franchise number. The league turned the franchise number into the average of a five-year period instead of the previous year. That change has had major consequences.

The franchise tag protection was given so a team would have the ability to keep its most valuable player. Until this year, the franchise number was determined by taking the five top salaries at a position and coming up with an average. The numbers had been based on the salaries from the previous year. Under the new rule, the number is based on the top salary in each of the five previous years.

Because salaries usually go up each year, under the old system, franchise numbers also rose each year. Taking the average salaries over a five-year period, in turn, will make franchise numbers drop. It's having a significant impact on negotiations for top players.

[+] EnlargeJermichael Finley
AP Photo/Morry GashJermichael Finley's new deal shows the impact of a change in how franchise tag values are calculated.
Start with the Jermichael Finley contract in Green Bay. Top tight ends make $7.5 million a year. Finley has all the potential to be a top tight end, but some dropped passes late in the season showed he needs more development.

The franchise number for tight ends dropped from $7.2 million to $5.4 million. So this offseason, the Packers had all the leverage in their talks. They could tell Finley they would be content to give him a one-year deal at $5.4 million and see how the season went.

Naturally, every player is looking for long-term deals and guarantees. Finley's agent had to do some scrambling. He and the team were able to work out a two-year deal at $14 million that paid him $5.75 million in 2012. The deal put Finley's salary cap number in 2013 at $8.75 million, which was important if the Packers have to franchise him in 2014.

If that happens, Finley would get a 120 percent raise and the Packers would have the right to keep him another year. In the big picture, though, the Packers were able to use the leverage of the lower franchise number to get a deal that they liked.

For years, agents and teams have used their franchise number to their benefit. When franchise numbers are high, the agents gain the leverage.

Look at the Peyton Manning deal of 2011 and how it's affected talks with Drew Brees in New Orleans. The 2011 franchise number for Manning last year was $23 million because of the 120 percent rule. Manning's agent, Tom Condon, was able to get a $23 million a year average over the first three years of the eventual contract because of the high franchise number.

Ultimately, the Manning deal averaged $18 million a year over five years.

Spin this ahead to the Brees discussions. The Saints believed they were fair in offering an $18.5 million average, which is the highest in football. Condon, who represents Brees, followed precedent and cited Manning's $23 million average as the new standard.

When both sides couldn't come to an agreement, the Saints slapped the franchise tag on him at $14.4 million. Both sides will continue talks.

The Seahawks used the franchise number in the Marshawn Lynch deal. Because the new franchise number for running backs dropped from $9.5 million to $7.7 million, the Seahawks felt good about giving Lynch a franchise offer of around $7.5 million a year for a long-term deal.

Lynch was too valuable for the Seahawks to lose. If no long-term deal were reached, Lynch was going to be franchised at $7.7 million. As backs get older, it's harder and harder for them to get long-term deals. The team would have the chance to franchise him a second year at $9.3 million if they played off the franchise tag.

It turned into an easy settlement. Lynch got guarantees equal to two years at franchise numbers, giving him $17 million guaranteed. He accepted a four-year deal at $30 million.

A lot of deals are settling around the new franchise numbers. Top players will always get their numbers, and salaries will always go up. It's just interesting to see how a little twist in a concept like the franchise tag can affect most negotiations.

John Clayton

NFL senior writer